The National Futures Association (NFA) announced its decision on Friday to permanently bar Success Bullion USA LLC, and Chris Jann its owner, from NFA membership, associate membership, and from acting as a principal of an NFA Member. The sanctions imposed also make Jann permanently ineligible to serve on a disciplinary committee, arbitration panel, oversight panel or governing board of any self-regulatory organization.
The NFA claimed that Success Bullion, a commodity trading advisor and pool operator located in San Francisco, failed to maintain adequate books and records, that it maintained misleading promotional material and that it allowed associates to “park” their registrations. Jann was also accused of failing to diligently supervise the activities of the firm.
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This case shows that a regulator can never be expected to truly know the conditions of all the firms under its domain. The association said that it started its investigation of the NFA member Success Bullion in January 2014, but that the firm had not been in operation for at least two years before that time. The owner had already migrated back to Taiwan in June 2011 and subsequently shut down the company.
It appears that the legal problem was that the websites set up by Success Bullion remained accessible on the internet after the firm was closed and also included the outdated reference to NFA regulations. Jann explained that he closed all client accounts, notified them of the NFA membership withdrawal and did not solicit any American clients. He had all clients sign risk disclosures and wire money directly to Gain Capital LLC (NYSE: GCAP) with whom he traded. All the websites affiliated with the firm have since been closed as well.